Retention Rate
The percentage of customers who remain subscribed over a given time period, and the inverse of churn rate.
Retention rate is the flip side of churn rate. If your monthly churn rate is 5%, your monthly retention rate is 95%. It measures how well you keep the customers you already have, which is what drives sustainable growth.
How to calculate retention rate
The formula is: Retention Rate = ((Customers at End − New Customers) / Customers at Start) × 100. You exclude new customers so you're measuring actual retention, not masking churn with fresh sign-ups.
Or the shortcut: Retention Rate = 100% − Churn Rate. Same result, less maths.
Why small improvements matter
Two percentage points doesn't sound like much. But going from 95% to 97% monthly retention means the difference between retaining 54% of your customers over a year and retaining 69%. Compounding is relentless.
In practice, the fastest way to move this number is to address involuntary churn: customers who didn't choose to leave but whose payments failed. Automated dunning recovers the majority of these, boosting your retention rate without touching the product.
Reduce your churn, protect your revenue
ChurnWard recovers failed payments automatically for $29/month. No percentage fees, no complexity.